Explore the advantages of signing a lease agreement.
Is Signing that Lease Agreement Right for You?
The real estate market is booming across the United States, especially
in select areas of California as well as Las Vegas. Even the sleepy
town of Boise, Idaho is experiencing record breaking primary
residential development. Where ever you happen to live, you have
probably noticed it’s not so easy to get into that coveted house you
have always dreamed of, despite the favorable mortgage rates. So what
should you do?
Lessons Learned from the Past
With such uncertainty around the real estate market, perhaps it is best
to stay away from owning your own property. Many so called experts
predict the housing market in the US has finally reach bubble status,
and expect that bubble to burst in the near future. They may have
submitted their predictions a bit early, but their advice should be
considered. If we learned anything from the stock market bubble and
subsequent crash of 2000, we realized frequently a conservative
approach to investing serves us well when uncertainty surrounds the
market.
Protect yourself and consider the advantages of renting or leasing
versus buying your own home. A renter assumes far less risk by signing
his/her name to a lease agreement than when closing on a house. Typically a rental agreement locks you
into a contract for a short period of time, relatively speaking, during
which the rental rate is locked as well. Such a contract can protect
you from the downswings of the real estate market, especially the
volatility frequently demonstrated by adjustable rate mortgages.
Granted, as a renter you don’t stand to gain any equity in the house
should the market turn up. However, you also don’t expose yourself to
the violent downswings in housing values wrought by an oversaturated
market. Should you buy a house now and a year later need to move to
pursue a new job opportunity, what happens when your realize those
inflated prices you paid for your house are not so inflated anymore,
and suddenly you owe more on your house than it is worth? That is
called negative equity, and instinctively you realize no good can come
of such a situation. Hence renting offers flexibility, both financially
and physically speaking.
Avoiding the Headaches of Ownership
By agreeing only to rent the dwelling, you manage to avoid many of the
disadvantages associated with owning a house. Normally the landlord is
responsible for general maintenance of the flat. Many home owners are
quick to offer their stories of frustration, disappointment, and even
anger when things go wrong in the house. Pipes burst, flooding occurs,
air conditioning units break during the scorching summer days of July,
and heating systems fail in the dead of winter. All these things can
and will happen, setting homeowners back considerably. Thus, as a
renter you can avoid many of the major financial investments owners
must make to maintain the comfort and livability provided by a
dwelling. Agreeing to a lease agreement helps mitigate the risks of living in a home or apartment.
Weighing your Options
A rental or lease agreement can offer many advantages to those of you looking for a place to live.
Ultimately, each individual must decide what is right for them. Some
are more than willing to bear the risk inherent to the housing market
because they have a strong positive cash flow and are in a position to endure the twists and turns of the market.
Don’t be afraid to weigh your options and consider the risks of owning
versus renting. For many, playing the game conservatively and waiting
for housing prices to come back down to Earth will prove to be a
successful strategy. There is no shame in signing that lease agreement,
living in an apartment for a year or two before moving on to that house
you have wanted so badly.
